Our Sector: Licensing update for SUs

This briefing from our friends at TLT solicitors is also available here Licensing briefing for Students_ Unions

Alcohol Wholesaler Registration Scheme comes into full force

April 1 saw the introduction of stage 2 of the Alcohol Wholesaler Registration Scheme (AWRS). HM Revenue and Customs (HMRC) introduced the scheme to tackle alcohol fraud. Whilst the majority of wholesalers of alcohol have had to register with the scheme for some time, now purchasers of alcohol from wholesalers are also required to take action.

From 1 April 2017, if you buy alcohol to sell from a UK wholesaler, you’ll need to check that the wholesaler has registered with HMRC and has an AWRS Unique Reference Number. All student unions that run their own bars will therefore need to ensure that their suppliers are all properly registered and a record is kept of the check in case of inspection. It is an offence to knowingly buy alcohol wholesale from a person who should be approved. Penalties can include a fine, imprisonment of up to 7 years or both.

There is an online look-up service of approved wholesalers to check your suppliers are registered, which should make the process reasonably straightforward.

For further information go to:

https://www.gov.uk/guidance/the-alcoholwholesaler-registration-scheme-awrs

Gambling in premises licensed to sell alcohol  

The strict rules on gambling in premises licensed to sell alcohol can be a little confusing. However, getting it wrong can lead to serious trouble from the Gambling Commission. Here is a quick guide to what can and cannot be done for some more popular gambling activities:

Bingo  Alcohol licensed premises are able to provide facilities for bingo, provided that certain restrictions are complied with. These include that, in any seven day period, the aggregate stakes or prizes for bingo must not exceed £2,000.

Any bingo must comply with any code issued by the Gambling Commission relating to provision of gambling.

Betting  Commercial betting, regardless of the level of stakes, is not permitted in alcohol licensed premises. Those who facilitate such betting in pubs are providing illegal facilities for gambling and are breaking the law. Even where publicans accept bets on behalf of licensed bookmakers, or just facilitate betting through their own telephone betting accounts, they are acting as betting intermediaries and could be prosecuted.

Licensed bookmakers with a remote or ancillary licence can accept telephone bets from a customer watching an event in a bar, as long as that customer has an individual account with them. It is illegal for bookmakers or their agents to sit in the bar taking bets themselves.

Poker  Poker in bars is restricted as follows:

  • There is a maximum value to both the amount that can be staked and the prize that can be offered when playing poker in a bar. The maximum stake per player is £5 per game, and the combined stakes for your premises must not exceed £100 per day. The maximum prize is £100 per game. This maximum includes money, payments in-kind, vouchers, goods, donated items, goody-bags, buy-ins at other poker tournaments and other items which have a value.
  • Additionally, you cannot charge a participation fee, including for example by having entrants pay a compulsory charge for a meal. It is irrelevant whether the charge is said to be voluntary or compulsory, particularly if customers are prevented from playing if they do not make the ‘voluntary’ donation, or there is strong peer pressure to make the donation.
  • Poker run as private gaming can potentially take place where a group of friends hire a room in a bar for a private function where poker is played. However, organisers need to be very careful that the particular area of the bar in which the gaming takes place is not accessible by members of the public. Those participating must not be selected by a process which means that, in fact, they are members of the public. The law in this area is complex and organisers should seek their own legal advice.

It is a condition of private gaming like this that no charge is made for participation. A deduction from or levy on amounts staked or won by participants in gaming is a charge for participation in the gaming.

It is recommended that you seek legal advice if you are looking at organising gambling in your SU venue. More information is available on the Gambling Commission website at: http://www.gamblingcommission.gov.uk/pdf/Ad vice-on-gaming-in-pubs-and-alcohol-licensedpremises.pdf

Going to the pub is good for you

Researchers from Oxford University have established that frequenting bars makes people happier- who’d have thought! The report suggested that the social bonds and associated stimulus with engaging in networks with other people, could buffer against mental and physical illness. The research by the University of Oxford’s Experimental Psychology Department was published in the Journal of Adaptive Human Behavior and Physiology. Of course, this does not absolve bar staff from having to ensure that they are not serving alcohol to people who are already intoxicated, but the social side of university, we say, is at least as important as the academic…

Fabric Nightclub: Lessons to be learnt for running SU club nights

It was front page news in London and widely talked about throughout the clubbing world when Fabric briefly lost its licence following the deaths of two clubbers who had been at the venue. It’s not the purpose of this article to discuss the merits of either side of the case, but there are some points that can be useful to managers of venues that have club nights.

Part of the agreement between Fabric and the licensing authority was an overhaul of management procedures and a raft of new and amended conditions on the premises licence. These were designed to deal with the council licensing committee’s findings at the review that there was a serious issue with drugs within the venue. Islington Council said the changes, offered by Fabric, were “designed to ensure a zero-tolerance approach” to drugs.

Psychoactive Substances Act: A quick guide

The definition of a psychoactive substance within the Act is: “any substance which (a) is capable of producing a psychoactive effect in a person who consumes it, and (b) is not an exempted substance”. The trouble, of course, is deciding what a ‘psychoactive effect’ is and therefore whether a product is caught. Leaving aside this philosophical and etymological nightmare, it is still worth looking at what the Act is trying to do:

Q: What is the act not seeking to do?

A: With legislation like this, it is sometimes easier to chip away at the marble and reveal the sculpture within. Or, as Sherlock Holmes was wont to say: once you have discounted the impossible, whatever is left, no matter how improbable, must be the answer. Here are the things that the Act does not seek to outlaw:

  • Possession of psychoactive substances is not an offence, unless there is intent to supply  Medicines, alcohol, nicotine, caffeine, food and drink are all ‘exempted substances’. The Act also does not cover drugs banned as ‘controlled drugs’ under the Misuse of Drugs Act such as heroin, cocaine, cannabis etc
  • Products associated with food preparation (nitrous oxide, for instance) are exempt, unless being sold for the likely purpose of use as a ‘high’
  • Healthcare and research related activities are not caught, even if they include use of otherwise psychoactive substances not otherwise exempted.

The Secretary of State has the right to extend this list or indeed remove items from it as he/she sees fit, albeit such amendments need to be approved by Parliament following a consultation with the Advisory Council on the Misuse of Drugs. Will we ever see the Temperance movement lobbying to have alcohol removed from the list of exempted substances?

Q: What does the Act seek to catch?

A: The main purpose of the Act is to prevent the sale, importation and export of psychoactive substances not otherwise banned under other legislation. This is specifically targeted at ‘legal highs’ that do not sit on the list of banned drugs under the current legislation. This means it is targeted at:

  • Shops and market stall operators selling ‘legal highs’
  • Online sellers
  • Manufacturers
  • ‘pushers’ of legal highs

The above are classified as ‘prohibited activities’. However, the definitions themselves and the powers given to officers mean that there is a chance that the law goes further than intended.

Q: Could it have any other unforeseen effects/ consequences?

A: Whilst possession isn’t an offence, ‘importing’ is. Therefore if you buy substances online from oversees, you would be committing an offence that carries up to 12 months in prison or a fine. One of the ‘prohibited activities’ to be banned is: ‘assisting or encouraging the carrying on of a prohibited activity’. Given the resources the police have been deploying at music festivals and clubs (particularly dance music clubs) to try to prevent drugs being taken into such venues it is not beyond the wit of man to see hardpushed senior officers demanding operators of festivals and clubs take more stringent actions to ensure that such substances are not brought to the venues under threat of action being taken against them. As one of the powers available to police and local authorities is the closure of premises. This is a might big stack they can wave.

Q: Are poppers considered a Psychoactive substance?

A: The short answer is no. The reason this is an important question is that poppers are used within the LGBTIQ community for purposes other than to get ‘high’. In actual fact, it was determined that the effect of taking poppers was not psychoactive and therefore they could not be caught by the legislation. The truth is that before this was determined, it was possible that poppers would have been specifically exempted.

House of Lords Licensing Select Committee Reports

The House of Lords Select Committee has reported following its in-depth and lengthy investigation into the Licensing Act, some 12 years after it came into full force.

TLT actively took part in the process and indeed, comments made in the TLT response relating to the Late Night Levy were quoted directly in the report by suggesting that the LNL ‘re-framed the discussion in terms of who is responsible for causing the problems in the night time economy’.

The report is over 160 pages in length and goes into significant detail in terms of both the evidence presented and the committee’s recommendations.

Overview The committee has been scathing in its criticism of the legislation, the framework established by it, and the committees enforcing it.

Legislation The criticisms are directed at the floods of changes made to the Act before it had a chance to bed in, including major changes made by 6 separate pieces of legislation relating to policing and crime that came from the same department responsible for Act itself. Piecemeal amendments by 9 Acts of Parliament and various other pieces of secondary legislation, along with the regular changes to Guidance are all held accountable for what the committee deem to be an ‘unfortunate’ birth for the legislation.

Ad hoc attempts to ‘fix’ perceived problems such as the Late Night Levy and Early Morning Restriction Orders come under attack for their obvious flaws and failings, all of which, they suggest, should have been avoided.

They also raise concerns that the Policing and Crime Act 2017 will remove proper consultation as well as Parliamentary scrutiny from on-going changes to the guidance.

Framework The Licensing Act, in the committee’s opinion, was misconceived from the very start. Having a separate local authority licensing committee was a waste of time and resource, when the

planning system already in place had enough similarity and overlap with licensing to manage the process. The committee saw the requirement for separate licensing legislation, but not the need for a separate process.

The committee did say that they saw no good reason to change the four licensing objectives. Whilst they recognised health and wellbeing as necessary and desirable objectives in alcohol strategy, they accepted that it is not appropriate as a licensing objective.

Licensing committees The committee concluded that ‘The evidence received about the poor operation of licensing committees was convincing and the committee was extremely concerned by what it heard.’ This criticism relates to the consistency of decision making and the fact that witnesses from all sides felt that even the right results often were achieved by luck rather than a committee’s good judgement. The conclusion reached by the committee was that the system for determining licensing applications is in need of significant reform.

Recommendations that may see the light of day A number of the recommendations made by the committee could be implemented relatively easily, or have already been the subject of consultation. The most important are:

  • Fees for licence applications to be set locally. The Government has already consulted extensively and has held off changing the fees structure in anticipation of this report. It is likely, given the committee conclusion that S.121 of the Police Reform and Social Responsibility Act 2011 be brought into force, allowing secondary legislation to be introduced requiring local authorities to set their own fees, that this will be back on the agenda.
  • Legislation/Guidance relating to the Late Night Levy and Early Morning Restriction Orders either needs fundamentally addressing or repealing. This has been on the agenda. We would expect to see change rather than repeal is, albeit the committee recommended repeal, not reform.
  • Minimum Unit Pricing or a similar mechanism to be carefully considered if it is ruled to be legal in Scotland and can be shown to be effective. The Government to the Act has already dipped a tentative toe into these waters in terms of the mandatory condition setting a minimum unit price based on taxation. I expect further measures to be taken if and when MUP is implemented in Scotland.
  • Disabled Access statements in new licence applications. Again, this is taken from Scotland and the committee recommend something similar in England and Wales. This could be introduced through the Guidance.
  • Amendments to the hearing regulations. Following the committee’s scathing criticism of the inconsistencies in licensing decisions, it is not unfeasible to think that this would be addressed in secondary legislation, such as an amendment to the Hearings Regulations. At the very least this will include setting a minimum of 3 councillors hearing licensing matters and a revocation of regulations 21 and 23 which allow the committee to determine procedure and ‘lead’ the discussions with no cross-examination. Both actions were singled out for change by the committee.
  • A minimum training standard introduced for councillors sitting on licensing committees, along with refresher training. Such training requirement to be set out in the Guidance with councillors not being permitted to sit until such time as the training is completed.
  • Magistrates Court directions to state that where a licence is revoked on summary review and the premises is closed until the appeal is heard, the matter is to be listed for hearing as soon as possible thereafter.
  • The removal of the requirement to place a notice in the local paper. The committee found virtually no support for a continuation of the requirement.
  • The guidance to be amended ‘to make it clear that a licensing committee, far from ignoring any relevant decision already taken by a planning committee, should take it into account and where appropriate follow it and visa versa.’
  • The guidance to be revised to remove the section requiring committees to put more weight on police evidence, simply because of the source.
  • The creation of a national database of personal licence holders. Given the focus on personal licences in recent legislation and the accepted difficulties presented by the current lack of a database, this is likely to be moved up the agenda.
  • Enforcement officers and local authorities to be instructed to re-focus efforts on enforcement of the law relating to the service of alcohol to intoxicated persons.

This is not to suggest that all of the above will be implemented, only that some of them are likely to be revisited and could potentially lead to changes.

Recommendations unlikely to be implemented The committee made the following recommendations based on their finding that that Licensing Committees were unnecessary and complicated matters. These are unlikely to result in any changes in the short to medium term as they would require a fundamental redrafting of the Act:

  • The transfer of the functions of local authority licensing committees and subcommittees to the planning committee (whilst maintaining a separate licensing regime)
  • Licensing appeals be determined by the planning inspectorate using the same process as planning appeals

There is likely to be more devil in the detail, but it will be down to the Home Office to determine what changes, if any, they choose to introduce.

Specialists in licensing

TLT is recognised as having a leading national licensing practice. We provide strategic, commercial and practical advice on all licensing matters, including applications, variations, and compliance and enforcement issues.

We advise a broad range of clients from hotels, bars, clubs and restaurants to major music festivals, pub companies, sports clubs and race course operators. We support one-off events or venues as well as businesses with property estates that sometimes run into the thousands.

With our expertise in large portfolio licensing, we provide advice and IT solutions that will help streamline business processes and maximise revenue from operations. We advise at every level, from board level strategy to operational matters at individual premises.

Our advice is bespoke and designed around our clients’ specific business needs. We take a practical and commercial approach to ensure that legal requirements are met.

Piers Warne Associate

T +44 (0)333 006 0692 piers.warne@TLTsolicitors.com

Piers Warne is an associate in the licensing team is praised in Chambers for “always goes the extra mile to make sure issues are resolved in a speedy and efficient manner.”

He advises clients on all areas of licensing law and matters affecting the alcohol and entertainment industry for a large range of clients, from large pub-co’s to independent operators.

Specialists in Employment

Our Employment team is nationally recognised for its commerciality and exemplary client service. Our innovative approach ensures that we meet clients’ objectives on time and on budget.

We act for a number of students’ unions and our expertise is wide ranging. Navigating an increasingly complex regulatory environment we help to support student’s unions with strategic and business as usual advice. We also deal with disputes, mediations, complex tribunal claims and litigation.

Our ethos is to work in partnership with our clients, providing a service that’s joined up with their internal approach and adds value to their own team; we are seen by our clients as their trusted advisor. Our advice is always business focused, enabling our clients to make informed decisions and manage their risks, and much of the work we do is on a fixed fee or retainer basis

Stuart McBride Partner

T +44 (0)333 006 0329 stuart.mcbride@TLTsolicitors.com

Dave Maton Solicitor

T +44 (0)333 006 0602 dave.maton@TLTsolicitors.com

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